Export Processing Zones in Madagascar: an Endangered Success Story

The success of export processing zones in Madagascar, or Zone Franche, since 1990 is an isolated case in Africa, apart from Mauritius. This paper explains that Zone Franche has had a very significant macro-economic impact in terms of exports and jobs. Thanks to Zone Franche, before the 2002 crisis Madagascar had become the second largest African exporter of clothing, after Mauritius. The average wages paid in Zone Franche are lower than in the other formal sectors of activity, which is due to the characteristics of the labour employed. On the contrary, social conditions are better. The paper concludes that the future of Zone Franche is threatened by the new multilateral trade framework.